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Mortgage rates move lower
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December 14, 2000: 4:11 p.m. ET
Rates react favorably to continued signs of economic slowdown, lower inflation
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NEW YORK (CNNfn) - Mortgage rates dipped for the third consecutive week, reaching their lowest level in 17 months.
Rates continued to react favorably to the latest economic reports that hint at a lower inflation level.
The benchmark 30-year fixed-rate mortgage (FRM) averaged 7.42 percent for the week ending Dec. 15, its lowest level in 17 months and down from last week's average of 7.54 percent. A year ago, the same mortgage averaged 7.86 percent.
The average this week for a 15-year fixed-rate mortgage was 7.11 percent, its lowest in 17 months, down from the previous week's average at 7.19 percent. A year ago, the same rate stood at 7.47 percent.
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The Producer Price Index released today also points to a low level of inflation, bolstering the feeling in the financial markets that the Federal Reserve may lower rates early in the new year.
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Robert Van Order
Freddie Mac |
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One-year adjustable-rate mortgages (ARMs) this week averaged 7.05 percent, down from last week's average of 7.21 percent. The same mortgage averaged 6.49 percent this time last year.
[Click here to see a breakdown of U.S. mortgage rates by region.]
The latest employment data show job growth at lower levels, reaffirming the notion of an economic slowdown, said Robert Van Order, chief economist for Freddie Mac. "That's the kind of news that eases inflation fears, which, in turn, allows mortgage rates to settle at lower levels."
"The Producer Price Index released today also points to a low level of inflation, bolstering the feeling in the financial markets that the Federal Reserve may lower rates early in the new year," he said.
Freddie Mac (FRE: Research, Estimates), or Federal Home Mortgage Corp., is a publicly traded company the government established in 1970 to provide a flow of funds to mortgage lenders.
It buys mortgages from banks, bundles them and then resells them as mortgage-backed securities. Its products, and the products of other, similar entities, have become increasingly popular as an alternative to government-backed bonds, particularly with international investors. 
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Freddie Mac
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